This article will reflect on the compensation paid to Anwar Bin Abdul Ajib who has served as CEO of UEM Sunrise Berhad (KLSE:UEMS) since 2014. This analysis will also assess whether UEM Sunrise Berhad pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for UEM Sunrise Berhad
Comparing UEM Sunrise Berhad's CEO Compensation With the industry
At the time of writing, our data shows that UEM Sunrise Berhad has a market capitalization of RM1.7b, and reported total annual CEO compensation of RM1.5m for the year to December 2019. That's a notable decrease of 27% on last year. In particular, the salary of RM1.35m, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from RM831m to RM3.3b, we found that the median CEO total compensation was RM3.9m. This suggests that Anwar Bin Abdul Ajib is paid below the industry median.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | RM1.3m | RM1.7m | 92% |
| Other | RM120k | RM355k | 8% |
| Total Compensation | RM1.5m | RM2.0m | 100% |
Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. UEM Sunrise Berhad pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
UEM Sunrise Berhad's Growth
Over the last three years, UEM Sunrise Berhad has shrunk its earnings per share by 28% per year. It saw its revenue drop 31% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has UEM Sunrise Berhad Been A Good Investment?
With a three year total loss of 66% for the shareholders, UEM Sunrise Berhad would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, UEM Sunrise Berhad pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for UEM Sunrise Berhad you should be aware of, and 1 of them is a bit concerning.
Switching gears from UEM Sunrise Berhad, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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About KLSE:UEMS
UEM Sunrise Berhad
An investment holding company, engages in the township and property development business in Malaysia, Australia, Singapore, and South Africa.
Moderate growth potential with acceptable track record.
